Brazil Courts China to Boost Tech Ties

Welcome back to Foreign Policy’s Latin America Brief.

The highlights this week: We review the ups and downs of Brazilian President Lula’s recent China trip—including his comments on everything from trade to the war in Ukraine—and meet a groundbreaking Palestinian Chilean pop star.

The Brazilian megadelegation that traveled to China last week included a slew of businesspeople, seven ministers, five state governors, 27 lawmakers, and, of course, President Luiz Inácio Lula da Silva. While Lula’s comments about the war in Ukraine perhaps received the most coverage in the Western press (we’ll discuss those below in “In Focus”), the trip also reset his government’s relationship with its largest trade partner. In Beijing, Brazil and China signed a series of memorandums and deals that officials said are worth some $10 billion.

Lula has plenty of experience dealing with China and drew closer to the country during his two previous presidential administrations, from 2003 to 2010. In that time, the two countries signed an agreement to be strategic partners, saw soaring bilateral trade and investment, and co-founded the BRICS grouping along with Russia, India, and South Africa.

At the time, Lula and his advisors celebrated Brazil and China’s growing ties. But some in Brazil’s foreign- and economic-policy communities also started to question whether Brazil was being careful enough in its bilateral trade with China. The fine print of the various agreements signed last week suggests their concerns have shaped the new Lula government’s approach to Beijing.

During Lula’s first period in office, China had an overwhelming appetite for Brazilian raw materials such as soybeans, iron ore, and oil. But some makers of Brazilian manufactured goods reported difficulty selling on the Chinese market. Meanwhile, manufacturing’s share of Brazil’s GDP was shrinking fast. When Brazil’s foreign ministry published a collection of essays on Brazil-China relations in 2011, many debated whether economic relations with China were contributing to deindustrialization in Brazil.

Scholars have warned that premature deindustrialization is risky for developing countries. Many countries that have gone from poor to rich first built up their manufacturing sectors and only began to leave them behind when people migrated to high-skilled, high-wage jobs in other sectors. (Brazil moved along the first part of this path from the 1950s through the 1980s, when sectors such as metalworking, car manufacturing, textile production, and heavy machinery manufacturing grew.)

But in parts of the developing world seeing premature deindustrialization, such as Brazil, people often leave industrial sectors for low-paid, low-productivity work rather than higher-wage jobs. For example, a former factory worker might now work as a cashier, Uber driver, or street vendor. A whopping 39 percent of Brazil’s workers today toil in the informal sector.

A 2022 paper by economist and China expert Tatiana Rosito and Kings College London’s Vinicius Mariano de Carvalho—both of whom are Brazilian—argues that while Brazil and China have maintained “a successful complementary agenda,” trade data from the past two decades shows that Brazil “has not been able to significantly diversify its exports” to China.

Rosito now has a front-seat chance to change course: She and others who have called to refine Brazil’s strategy toward Beijing were named to senior positions in the new Lula administration.

Among the new faces in Brasília is Tatiana Prazeres, the foreign trade secretary of Brazil’s Ministry of Development, Industry, Trade, and Services. Prazeres told Foreign Policy that the new administration is seeking Chinese expertise and investment in Brazil that can promote “a neo-industrialization of the country” focused on green technologies and other high-tech sectors. She called these the “industries of the future.”

Brazil was the largest recipient of Chinese foreign direct investment in 2021, according to a China-Brazil Business Council report. Between 2007 and 2021, the group calculated that Chinese investment in Brazil went mostly to the electricity and oil sectors, and the two countries are reportedly planning a joint investment fund in green energy.

One of the memorandums signed last week committed to facilitating projects that include technology transfers; separately, deals were announced that include a green hydrogen plant, offshore wind projects, and the latest phase of a jointly produced satellite program, as well as a pledge to facilitate Brazilian start-ups commercializing their products in China and a plan to create a binational agricultural logistics company.

Many of the ideas that were announced “are still intentions” rather than concrete plans, as the economist Paulo Morceiro of the University of Johannesburg told Foreign Policy, “but it’s generally positive.” He said that Brazil should take advantage of the fact that it has many of the critical minerals needed for the energy transition, “and China has the technology.”

Yet the Lula administration’s frequent talk of new industrial policies—in partnership with China or not—has some economists nervous. Such policies are highly difficult to calibrate successfully, economist Emanuel Ornelas of the Getúlio Vargas Foundation told Foreign Policy. He said the current talk of industrial policy gives him “a little bit of goosebumps” and added that Brazil’s history is littered with failed industrial policies that led to industries that were “protected for decades and survived without becoming competitive internationally.”

Regardless of how Lula designs his latest industrial policies, the government does not have the money to launch the multibillion-dollar green stimulus packages that are all the rage in the United States and Europe. What it does have are raw materials, an internal market of 215 million people, and—if careful—the ability to bargain internationally.

Ongoing to Monday, April 24: Brazil’s Supreme Court holds a virtual trial for the first 100 people indicted for Jan. 8 attack on Brasília.

Friday, April 21, to Wednesday, April 26: Lula visits Portugal and Spain.

Wednesday, April 26: The U.N. Security Council discusses Haiti.

Sunday, April 30: Paraguay holds general elections.

AMLO’s bad week. After reporting last year revealed the Mexican government to be one of the biggest users of NSO Group’s Pegasus spyware, President Andrés Manuel López Obrador publicly swore off using the software. But new analysis by tech watchdog group Citizen Lab found that Pegasus was used to hack two human rights workers in late 2022, after López Obrador’s pledge.

On Tuesday, meanwhile, Mexico’s Supreme Court ruled that López Obrador’s efforts to put the National Guard—a security force he founded in 2019—under military rather than civilian control were unconstitutional. It was a major rebuke to López Obrador’s security agenda.

Downtown revitalization dreams. The city government of Rio de Janeiro has purchased a crumbling art deco apartment tower that was one of the first skyscrapers in Latin America when it was built in 1929. It is part of the city’s plan to revitalize and bring residential living back to its decaying downtown; the area’s cultural nightlife has bounced back since the COVID-19 pandemic, but its residential occupancy is lower than other neighborhoods.

The vision to revamp Rio’s city center is a return to unfinished business for current Mayor Eduardo Paes. Paes previously served as mayor from 2009 to 2016 and, in the run-up to the 2016 Olympics, argued that the event would spur downtown development. His administration replaced a highway in the neighborhood with a pedestrian promenade and funded a new museum in the years prior to the Games. But Brazil’s economy slowed dramatically in 2015, and some of his plans remained incomplete.

Elyanna performs at the Gobi Tent during the 2023 Coachella Valley Music and Arts Festival in Indio, California, on April 14.Monica Schipper/Getty Images for Coachella

Palestinian Chileans in the spotlight. Last weekend, Palestinian Chilean pop star Elyanna became the first artist to perform a full set of music in Arabic at the Coachella music festival in California. Chile is thought to be home to the largest Palestinian diaspora outside the Arab world; as many as half a million people of Palestinian heritage are estimated to live in the country, where support for Palestine enjoys backing across much of the political spectrum.

Chilean President Gabriel Boric delayed issuing credentials to Israel’s ambassador to Chile last year over the Israeli military killing of a Palestinian teenager in the West Bank. While he was a legislator, Boric voted to support a boycott of goods made in Israeli settlements. He has also accused Israel of genocide.

Elyanna grew up in Nazareth, a Palestinian Arab city in Israel, where her brother encouraged her to sing in Arabic. Her rising star has prompted critics to wonder whether Arabic-language music could be gaining broader acceptance among Western audiences, just as Spanish-language music has in recent years. Elyanna’s music incorporates melodies from classic Arabic songs as well as other genres, such as reggae. “I think the fusion between all these styles is what makes the sound super unique and special,” she told NPR.

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FP’s Most Read This Week

• The West Is Preparing for Russia’s Disintegration by Anchal Vohra

• Macron Said Out Loud What Europeans Really Think About China by Benjamin Haddad

• Ukraine’s Longest Day by Franz-Stefan Gady

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In Focus: Lula’s Ukraine Comments

Brazilian President Luiz Inácio Lula da Silva gestures during an event at the Planalto Palace in Brasília on April 20.EVARISTO SA/AFP via Getty Images

While Lula has tried to position himself as a neutral and trustworthy arbiter to help mediate an end to Russia’s war in Ukraine, a string of his comments in recent days drew sharp criticism from U.S. and European officials, who accused the Brazilian president of taking Moscow’s side.

In Beijing on Saturday, Lula said that the United States should stop “encouraging war”; at a stop in the United Arab Emirates on Sunday, he said that the decision to have a war “was made by two countries.” On Monday, Russian Foreign Minister Sergey Lavrov arrived in Brazil for a previously scheduled trip and said that Russia and Brazil have a “similar view” of the war.

Lula’s comments were “simply misguided,” U.S. national security spokesperson John Kirby said Monday. On Tuesday, White House spokesperson Karine Jean-Pierre said that a press conference given the previous day by Brazil’s foreign ministry about the war did not feature “a tone of neutrality.”

In Europe, officials publicly criticized the comments, and an internal EU briefing reportedly voiced concern about Brazil’s stance on Ukraine. Ukraine’s foreign ministry said Tuesday that “the approach that puts the victim and aggressor on the same scale” is “not in line with the real state of affairs” and invited Lula to visit the country.

By Tuesday, Lula had issued a new statement condemning “the violation of Ukraine’s territorial integrity,” and on Wednesday, his foreign affairs advisor Celso Amorim discussed the war with White House National Security Advisor Jake Sullivan, where there was a “frank discussion in an attempt to clear up misunderstandings,” Bloomberg reported.

Sullivan and Jean-Pierre said that the Brazil-U.S. relationship remained strong, but commentators overwhelmingly agreed that Brazil has burned some of the Western goodwill it initially enjoyed after Lula’s inauguration in January. Brazil should assume “real commitments to liberal democracies that helped defeat Bolsonaro’s putschism,” Brazilian journalist João Paulo Charleaux tweeted. “It’s necessary to take a side in international relations.”